How Do You Spell ADJUSTED PREMIUM?

Pronunciation: [ɐd͡ʒˈʌstɪd pɹˈiːmi͡əm] (IPA)

The term "adjusted premium" is commonly used in the insurance industry to refer to the premium that has been modified based on certain factors, such as the risk level of the insured party. In terms of its spelling, "adjusted" is pronounced as /əˈdʒʌstɪd/ with the emphasized syllable being the first, while "premium" is pronounced as /ˈpriːmiəm/, with the emphasis on the second syllable. The word can be broken down into two separate parts, with "adjust" meaning to alter or modify and "premium" referring to the amount paid for insurance coverage.

Meaning and Definition
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ADJUSTED PREMIUM Meaning and Definition

  1. Adjusted Premium:

    The term "adjusted premium" refers to the modified amount of premium or insurance rates paid by an insured person or entity, which is recalculated based on certain factors or changes in the insured's circumstances. It represents the updated premium amount that reflects the alteration in the risk or coverage involved.

    Adjusted premiums are commonly recalculated in response to changes such as policy amendments, increases or decreases in insured values, modified risk factors, or changes in the insured's claims history. Insurance companies may adjust premium amounts to accurately align them with the updated risk exposure presented by the policyholder.

    This modification in premium serves as a way to maintain fairness and accuracy in insurance pricing, ensuring that premiums reflect the appropriate level of risk involved. The adjustments are typically carried out by insurance underwriters who assess and evaluate the policyholder's information and risk profile.

    Furthermore, adjusted premiums are usually implemented during the renewal of insurance policies or when policy changes are made. In such cases, the insurer reviews the current and updated details of the insured's risk and adjusts the premium accordingly to maintain the equilibrium between the coverage provided and the associated risk.

    Overall, the concept of adjusted premiums helps insurance companies maintain a balanced approach to pricing based on accurate risk assessment and policy modifications.

Etymology of ADJUSTED PREMIUM

The word "adjusted" comes from the Latin word "adiustare", which means to make something "fit" or "adapt". The word "premium" has its origins in the Latin word "praemium", meaning "reward" or "prize".

When combined, the term "adjusted premium" refers to an insurance premium that has been modified or changed to reflect various factors, such as the risks involved, the insured person's age, medical history, or other relevant variables. It indicates the amount of money an individual or entity needs to pay to maintain an insurance policy with adjusted terms and conditions.